Digital transformation within Microsoft IT

Around the world, companies and organizations—and the IT leaders who support them—are urgently re-inventing their cultures, skills, and measures of success to respond to the challenges and opportunities presented by the digital revolution. It’s certainly the case at Microsoft.

The digital economy creates daunting requirements for operational structures and business architecture, particularly for any established organization with legacy systems and infrastructure. In a pre-digital economy, we focused on process efficiency and effectiveness, and executed with a divide-and-conquer approach. In a digital economy, we architect for agility and new types of business models, we empower employees and customers to innovate at a pace unimaginable in earlier generations, and we embrace new values of building on top of others’ ideas and iterating rapidly.

As a result, the discussion around technology platforms is no longer confined to IT. Leaders from sales, marketing, support, human resources, and elsewhere view technology as a core part of innovating their processes. It’s up to IT leaders to help drive innovation across the full range of their companies’ operations, whether or not the IT organization actually owns the technology.

IT’s expanded role within Microsoft

Microsoft IT plays two roles within the company. Similar to IT teams in other large enterprises, we help the company transform while managing applications, infrastructure and security. Unlike many of these IT teams, we also serve the roleof enterprise customer advocate by testing new software products and services and providing feedback. As Microsoft’s first customer we look at scenarios that cross multiple product groups to make sure there is a great end-to-end experience, and deliver that feedback to the product engineering teams. We then showcase what we do in Microsoft IT [here] to inform and help our customers learn from us.

​The goal here is to deliver end-to-end services for our consumer and commercial marketing plans around the world

In the past year, we’ve pushed collaboration across the company to make sure that both IT roles are delivered effectively, regardless of organizational boundaries. To help transform the company, Microsoft’s leaders continue to raise expectations around the role that IT can play by aligning digital services into 15 cross-company service offerings. These service offerings reflect the core process and capabilities of the company and bring together all facets of IT into what I’m calling“One IT”.

Each service offering has an owner. In some instances, that owner is an IT leader, whilein other instances they are a business leader. The owner and team are responsible for establishing the vision for the service offering, designing the roadmap to achieve that vision, and identifying dependencies with other service offerings. Finally, each service offering is measured by a set of business outcomes.

Let’s take the marketing service offering as an example.The goal here is to deliver end-to-end services for our consumer and commercial marketing plans around the world. A desired business outcome for this service offering is to generate qualified leads that can be acted upon by the adjacent service offering: sales. While there are other business outcomes, the qualified lead is a successful business outcome that both IT and marketing leaders can work together to achieve.

How IT delivers on digital transformation

In order to be as aligned as possible with the digital transformation Microsoft CEO Satya Nadella and his leadership team are driving for the company, I have asked my team to align IT priorities along thefour pillars of digital transformation that Satya has identified.

Engage your customers: as a company we need to understand customer behavior. Intelligence plays a critical role in understanding and dissecting massive amounts of data to recognize patterns of sentiment and behavior across our customer base. To get that data, we will reach out to customers in context and personalize at scale. In this area Microsoft IT has several priorities:

• Build the infrastructure to enable customer engagement, such as telemetry, a 360-degree view of the customer, and modern commerce systems.• Drive viral find, try and buy opportunities that help cross-sell and up-sell, and build these capabilities into our product services.• Ensure our core services are API (Application Platform Interface)-enabled to allow simpler integration of the platform.• Add self-service with bots in customer support.

Empower your employees: knowledge and insight exists inside your infrastructure; it’s just waiting to be found. By securely breaking down information barriers we’ll understand and learn how everyone in the company uses their time and help maximize the impact of our workforce by:

• Transforming business processes for marketing, finance, HR and others, and making the processes easier to use and more intuitive across platforms.• Reinventing collaboration productivity• Enabling a data-driven culture with curated, easy-to-access data• Providing a mobile experience on any device

Optimizing your operations: Digital technology now allows businesses to move at an incredible speed and accelerates the responsiveness to uncover issues and inefficiencies, predict what will happen, and then adjust as needed. In this area, IT is helping Microsoft in several ways:

• Modernize our application portfolio, processes and skills• Migrate to the cloud by prioritizing highest opportunities to fund transformation• Focus new automation on the highest opportunities to eliminate manual work

Transform your product: Every company is becoming a data company. We need to create connected services and generate insights to see what can be monetized to unlock new business models. IT will support these efforts by:

• Helping the company transition from licensed revenue to usage and consumption models• Tracking and analyze daily, weekly, and monthly active users• Incenting the sales force and partners on product and services used by the customer instead of products and services sold.

Our expectation is that by focusing on business outcomes of service offerings, we’ll better align all digital and IT investments across the company. This coordination will empower Microsoft employees to engage our customers with a more thorough understanding of their needs, while we optimize business operations so that we can transform products and our business model.